A civil lawsuit filed in wealthy Marin County alleges that the principals of a real estate investment firm defrauded over 100 victims-plaintiffs of at least $27 million of investment monies in a Ponzi scheme that has attracted the attention of the California Department of Justice.
Investment adviser Gary Armitage, his firm AGA Financial, business associates James Koenig of Asset Real Estate Investment Co. (AREI) and Jeffrey Guidi are the defendants in the lawsuit. Armitage has filed bankruptcy, claiming assets of between $1 million and $10 million while owing his creditors $50 million to $100 million.
Walnut Creek attorney Richard Miller is representing the 122 plaintiffs and is attempting to have the lawsuits against the defendants - filed in Marin, Sonoma, Alameda and Shasta counties - consolidated and tried before one judge in Marin County.
The Ponzi scheme may have elements of financial elder abuse, as many of the victims are elderly. According to Robert and Dilla Sunderland, both in their 70s, they were introduced to Gary Armitage and Jeffrey Guidi when their employer, Fireman’s Fund Insurance Company, sponsored a class on investments [note: talk about irresponsible [note: what on earth was Fireman’s Fund thinking?]. Robert Sunderland stated “You had to be 55 or older to attend the classes”.
The investments being peddled by Armitage and Guidi were in purchasing and running assisted-living facilities and a golf course. Investors purchased securities that had been issued for the properties, were promised 8-12% annual returns and a share of profits once the properties were sold.
Attorneys for the defendants deny that they did anything wrong and claim the losses were due to the collapse of the California real estate market. That said, at least one investor has stated that she was never told of James Koenig’s criminal record, which included a sentence of 2 ½ years in federal prison following his guilty plea to two counts of mail fraud.
For more info: San Jose Mercury News
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